Mediation law in Pakistan

Pakistan Mediation Laws

Mediation law in Pakistan

Looking for advice on Mediation Laws in Pakistan? Mediation is often a quicker, and more cost effective, way to reach an agreement than going through the court system. The Josh and Mak team excels at the  knowledge and practice of  all aspects of mediation laws in Pakistan and have produced this guide to offer further insight for our Client Base, into how it works.

Feel free to call us for a chat if you would like our help with mediation or any other legal matters.

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 Mediation Law in Pakistan

Pakistan is not a signatory on any international treaties pertaining to mediation. The mediation law in our country is not based on any of these treaties either.The primary source of the law that relates to mediation is found in the amended version of the CPC, Civil Procedure Code 1908 with the relevant sections being 89-A and Rule 1A of Order 10. There are also provisions relating to conciliation and mediation found in the Small Claims and Minor Offences Courts Ordinance, 2002, the Industrial Relations Act, 2012, the Income Tax Ordinance, the Customs Act, and the Federal Excise Act.

Mediation Law in Pakistan: Obligations and mandatory provisions

Mediation isn’t obligatory in Pakistan. A court could refer a civil dispute to mediation as long as both parties agree to it but they cannot impose or compel mediation provisions on anyone.

There are currently no provision in the domestic mediation law that has to be considered in a mediation proceeding. Neither is there a provision to resolve disputes in a court-annexed mediation. As mentioned above, the courts can refer cases to mediation but all parties must agree to it. They can stipulate a time frame for the mediation to be completed within, which typically included the result being reported back to the court.

Mediation Law in Pakistan: Mediation and arbitration

Mediation can be combined with arbitration proceedings; med/arb, arb/med etc.

Arbitrators are fully aware of mediation and could be willing to transfer cases from arbitration to mediation of all parties agree. ADR, Alternative Dispute Resolutions, are still at the fledgling stage in Pakistan.Although the Industrial Relations Act offers conciliation as a tool for ADR in labor related disputes it is a route that is rarely used.

ODR or Online Dispute Resolution in Pakistan

There is currently no mechanism in place for online dispute resolutions in Pakistan. Neither is there any kind of online mediation service in place.

Mediation confidentiality in Pakistan

Mediation within Pakistan is recognized as a process which must be confidential. The courts of Pakistan won’t entertain any action filed when the basis of this in information which parties have shared during mediation. Courts consider these proceedings to be strictly confidential and therefore such actions would be a breach of that confidentiality.

In the same context, a mediator will never be called to give evidence before a court. Mediation agreements that were signed before the parties commenced mediation contain standard clauses whereby parties must agree that their mediator won’t be called on to give evidence in court.

In court referred mediation cases, and on conclusion of that mediation, the court won’t call for any kind of detailed report regarding what what said within that mediation. Should it fail, the mediator will release a simple statement to the court stating that there was no result and this is sufficient for the courts.

When a settlement has been reached that settlement is duly recorded and the court will pass judgment on it to make this settlement enforceable. In such a case, the contents of that judgment are no longer confidential for purposes of the court order.

Limitation periods in Pakistan

A mediation proceeding doesn’t stop or suspend the period of limitation in place for a court claim. Pretrial cases with are then referred to mediation could become time barred should the limitation period elapse. Parties can’t consent to waive limitation.

Mediation Settlements in Pakistan

Settlement agreements are in the nature of contractual agreements and therefore not subject to automatic enforcement but are on par with binding contracts. Breaching any agreed terms within a binding contract gives rise to causes of action and parties have to file an action in the court as well as proving such a breach with leading evidence.

A settlement agreement reached within mediation, irrespective of whether it was arrived at through court referred mediation or pretrial mediation, is enforceable by the settlement being filed in court and a judgment being obtained under the Code of Civil Procedure; CPC.

Once all parties have signed the settlement agreement it’s not possible to challenge, revise or withdraw the same except when the opposing party can show fraud, coercion, undue influence or misrepresentation.

After a settlement agreement has been signed by the parties, it is not possible to revise, withdraw or challenge the same unless the opposing party can show coercion, fraud, misrepresentation or undue influence.

Institutions for mediation in Pakistan

The biggest national mediation body is the Pakistan Mediators Association and consists of over 100 mainly CEDR, Center for Effective Dispute Resolution, accredited mediators.

The second largest mediation body in Pakistan is the Lahore Chamber of Commerce and Industries Mediation Center. Situated in the Punjab province, the center has around 65 mediators which are all CEDR trained.

The first, and therefore oldest, mediation centre in Pakistan is the KCDR; The Karachi Centre of Dispute Resolution. It is based in Sindh province and boasts about 55 mediators, all fully accredited.

The development of mediation in Pakistan

In terms of ADR, mediation is picking up slowly in Pakistan, although statistical data is somewhat scarce. According to the annual 2013 KCDR report, the cases which were successfully referred to mediation.According to the information available from the International Finance Corporation on the 31st December 2013, along with KCDR Annual Report from the same year, the total number of accredited mediators in Pakistan was as follows;

Karachi (Sindh)

  • 80   trained mediators: 80
  • 51   CEDR-accredited mediators: 51
  • 13   CEDR-trained master trainers: 13
  • 479 KCDR MT trained and 479 judicial officers
  • KCDR MT trained: 305 lawyers, 109 business managers, 40 Ombudsmen   and 18 Islamic clerics.

Lahore (Punjab)

  • 81 CEDR-accredited mediators: (47 professional and 34 judicial officers)
  • 10 CEDR-trained master trainers
  • 18 CEDR-certified mediators specifically trained for trade and tax disputes

The participants came from both the public and private sectors of Pakistan, ie;

The Board of Investment, the Federal Board of Revenue, the Government of Punjab, the Federation of Pakistan Chamber of Commerce, the Finance Department, the Ministry of Commerce and the Punjab revenue Authority, among others.

An example is the ICAB, Ismaili Conciliation Arbitration Board, is also a place of mediation training for the members within the community. Mediation here are mainly commercial or family disputes which are conducted on a purely voluntary basis.The Pakistan Mediators Association confers mediation accreditation within the country which aspire to UK CEDR standards and in April of 2015 accredited 17 officers from the CPLC; Citizens Police Liaison Committee. On average, the CPLC is receiving 10-20 mediation cases per month.Over the past year, several cases that involved foreign parties were settled in Pakistan using international mediation.

The main areas of dispute which go to mediation

Currently, the most commonly referred mediation cases are for commercial disputes. Whilst the CPC does contain provisions for civil disputes to be referred to mediation, there’s no equivalent provision under Pakistan’s Criminal Procedure Code. This is the reason why criminal cases don’t get referred to mediation.

Pakistan’s ICAB system encourages the amicable resolution of conflicts through the use of impartial arbitration, mediation and conciliation on a voluntary basis.

By far, most of the disputes within the Pakistani Ismaili Community end up being settled by mediation.

There has also been a rise in the disputes being referred to the CPLC for mediation.

Procedural requirements for mediation in Pakistan

As it stands, Pakistan doesn’t have any mandatory procedural requirements relating to mediation proceedings and parties typically follow the best international practices. These include the likes of site visits, preparation of the summaries to be submitted to the mediator, drafting the opening statements, phone calls of both a solo and conference nature, the finding and assessing of the best and the worst alternatives to negotiating agreements, etc etc

The structure of the mediation process in Pakistan

The typical steps a mediator will take in preparing for a proceeding include the initial contact, the signing off of the mediation agreement, briefing and assisting the parties in their preparation and scheduling the time and the date for the mediation session.

The structure of a mediation proceeding is as follows;

  • The preparatory stage
  • The joint meeting at the opening stage
  • A private or caucus meeting during the exploration phase
  • A joint meeting during the bargaining phase
  • The joint meeting during the concluding phase

A typical day of mediation will last between 8-9 hours including breaks for prayers, may well involve more than one sitting and could take up to 3 or 4 days of sittings in order to reach the conclusion.

Mediation styles in Pakistan

The styles of mediation can range from facilitative and process focused to the content focuses and evaluative. In other words, mediation styles differ greatly between mediators. Most however, due to their training, are very aware that these aren’t separate camps so to speak but are at different ends of the spectrum that is made up of possible mediation interventions that are dependent on the circumstances and facts of each case as well as depending on the choices made by the mediator during the different stages of the mediation process.

Mediators will use a combination of caucus or private and joint sessions during the mediation process. The choice of the joint or private sessions very much depends are how far the parties are from the potential zone of agreement.

Co-mediation proceedings in Pakistan

It all depends on the parties whether a co-mediator is used and a mediator may suggest this possibility either before or after the mediation has commenced. Co-mediation costs more and for this reason the majority of parties chose not to use it.

There are no restrictions on who parties can invite to the mediation sessions in terms of tax consultants, advocates etc. Most of the lawyers who have chosen to be present during the opening phase will opt to leave their clients with the mediator to continue the process without them. They tend to rejoin the process later down the line once the court work has been concluded or when their parties request their presence. There is no bar in place on the calling of witnesses and experts to the mediation sessions.

Specific mediation procedures and dispute and conflict management systems in Pakistan

Dispute managements systems which also involve mediation aren’t common practice within Pakistan. Nether published or reported information is readily available regarding any companies having a dispute management system in place for the resolution of conflicts relating to employment matters or anything else.

The model articles of association of an LLC, Limited Liability Company, that were published by the Securities and Exchange Commission of Pakistan have a clause relating to dispute resolution which refers potential disputes between directors, management and shareholders to mediation.

The rising popularity of mediation clauses in Pakistan

The popularity of mediation clauses is rising all the time in regards to the drafting of contracts. At present there is no special requirement for an mediation clauses nor any court decisions which refer to any escalation clauses.

There is no legal requirements pertaining to the contents of a settlement agreement between the parties and mediator., the only restriction being that the parties can’t interfere with third party rights.

The parties are under no obligation to conclude the agreement between the parties and the mediator or between the parties involved and they are free to finish the mediation with or without a settlement.

Costs of mediation in Pakistan

Pakistan offers no official fee scale that has be used by the mediator and/or the parties and the fees vary between the mediators. The mediation centers, however, do fix their own fee schedules. An example of the Lahore Chamber of Commerce and Industries’ fee schedule is as follows (all monetary values are in PKN rupees):

Case value                     Fee per party                    Total fee

Up to 1 million                         7,500                             15,000

1-2 million                              15,000                             30,000

2-3 million                              22,500                             45,000

3-4 million                              30,000                             60,000

4-5 million                              37,500                             75,000

5-6 million                              45,000                             90,000

More than 6 million         50,000                                 100,000

The Karachi Center of Dispute Resolution also has their own fee schedule. The first 2 columns are in PKN Rupees and the last one in US dollars;

Case value                   Fee per party            Fee per foreign client (US$)

Up to 1m                         7,500                                       750

1-2 million                        15,000                                     1,500

2-3 million                        22,500                                     2,250

3-4 million                     30,000                                      3,000

4-5 million                        37,500                                     3,750

5-6 million                      45,000                                      4,500

More than 6m    50,000                                      5,000

CPLC and ICAB and CPLC mediation proceedings are conducted without any charge to the parties. Mediators who are member of the Pakistan Mediators Association’s panel are free to set their own fees. Courts frequently organize mediation weeks for family disputes or small claims on the pro bono basis.

Regulation of mediators in Pakistan

Pakistan currently has no specific regulations in place for mediators and the market is entirely self-regulating. Foreign mediators are permitted to visit Pakistan in order to mediate subject to obtaining the necessary visa. Those foreign nationals who work full time in Pakistan must have a work permit and be registered with the Pakistani tax authorities.

Mediator training in Pakistan

There are no mandatory requirements in place regarding the training of mediators and there in neither an official nor public exam which leads to qualification. The majority of those mediators practicing in Pakistan are accredited by the CEDR, the standards of accreditation of which are very similar to those from CEDR UK.

Accreditation that is led by a CEDR trained faculty such as the Pakistan Mediators’ Association, will focus on the skills that are needed to become a good mediator with the emphasis being on theoretical, practical and critical understanding of the importance of process, content and relationship skills for the effective mediation of commercial disputes.

There are 56 hours of training involved in become an accredited mediator and this comprises of;

  • 8 hours of pre-course reading
  • 24 hours of course work
  • 8 hours of coaching
  • 16 hour/2-day assessment or evaluation

Further education for mediators in Pakistan

There is no current requirement in Pakistan for mediators to undertake further education and there isn’t a credit point system for the continuation of mediators education.

The accreditation of mediators in Pakistan

There isn’t a formal system regarding mediators certification in order to establish their competence. The majority of those mediators practicing within Pakistan are accredited by CEDR and the Pakistan Mediators’ Association. The free market is what determined the best mediator for the job.

Mediator liabilities and sanctions in Pakistan

No formal rules are in place relating to the duties of mediators within the mediation procedure. They do, however, have a professional duty of care and therefore personally liable in case of any breaches of that duty of care which can include misconduct etc.

In the case of a breach in their professional duty of care or misconduct the mediator may lose their affiliation with the relevant mediation center.Mediators aren’t obligated to have professional indemnity insurance as it isn’t actually available within Pakistan.

Appointments of mediators in Pakistan

There are no regulations relating to the appointment of a mediator, either official nor from any private institution. Most mediators are given cases which have been referred by the courts. Even though mediators aren’t obliged to give notice of any conflicts of interests within the course of the proceedings they have been appointed to they will, however, in most cases disclose this in a professional capacity to both parties before taking on the mediation case.

 

 

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